Learning Interest rates and central bank in fundamental analysis.
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Understanding interest rates...?
Is the amount charged on the proportion of the money being lend or borrowed .
Central Bank ,
This refers to the national bank that provide financial and banking services for it's country government and several banking services .Example Federal reserve (FED) for USA , The bank of England -UK , Deutsche Bundesbank -German.
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| A security guard walks by an image of the Federal Reserve.Source cfr.org |
The influence of central bank in forex market
1. Regulating money in circulation, they isue notes and coin in the circulation, they isue money supply . Due to this make liquid ity for people to make transactions.
2.Open market operations and interest rates policies which make large extent of currency rates.
3.Strengthening currency's, due to increase in interest rates.
Relationship between the interest rates and currency's value...
1.Higher interest rates lead to currency strength, increasing interest attract the most foreign capital and gives interest to investors who invest because currency value grow . Making the currency to dominate to people to hold the currency because of the profit which will gain to the investors.
2.Lower interest rate lead to currency becoming week, the investors don't gain due to the situation it's so hard for the value of the currency to raise ,hence investors not interested in investing.
Areas to find central bank data release...
Calendar
Board of Governors of the Federal Reserve System (.gov)
Federal reserve › news events › calendar
European Central Bank (ECB):Website: https://www.ecb.europa.eu/ECB .europa
Deutsche Bundesbank for GERMAN:
https://www.bundesbank.de/enDeutsche Bundesbank
Please don't miss the lesson 4 on Fundamental analysis in geopolitical factors.Lesson 4